HMI appoints independent financial adviser for privatisation deal

HEALTH Management International (HMI) has appointed Ernst & Young Corporate Finance as the independent financial adviser for the deal to take the company private. 

Led by HMI's management and private equity firm EQT, the bid in July to privatise HMI by way of a scheme of arrangement values the company at S$611 million. Minorities can either accept S$0.73 in cash for each HMI share, or swap them for new shares in the offeror, issued at S$0.73 per share.

After news of the offer, Maybank Kim Eng downgraded its rating for HMI from "buy" to "hold", saying investors of HMI should take the S$0.73 offer price as the valuation "appears fair" and is a clean exit. CGS-CIMB called the cash option "fair but not compelling", deeming it fair as it is on a par with current valuations of Asean hospital operators. It did not change its "add" call and target price of S$0.68. Meanwhile, UOB Kay Hian said the offer is a healthy one to accept, while viewing the alternative of holding private shares with the uncertainty of future re-listing to be "undesirable".

Shares of HMI had rallied after the offer was announced. The counter closed unchanged on Friday at S$0.715 before the announcement.